Documents handed out:
Committee report onProvincial Treasuries Expenditure Review for third and fourth quarter of 2015/16 financial year
[All Committee Reports available under Tabled Committee Reports once published]
The Committee met to consider and adopt its report on the Provincial Treasuries expenditure review for the third and fourth quarter of the 2015/16 financial year, and to table its report on the Mexico Study Tour.
It emerged during deliberation of the minutes for the 11 October that the Committee had had problems regarding the utility of the Contingency Fund for two evenings’ dinners during the study tour to Mexico which it had undertaken. To that extent Parliamentary authorities had given the Committee three choices:
- Scenario one: to use Contingency Funds there had to be permission given by Parliament as the funds belonged to Parliament. Parliament had not been engaged that evening in Mexico. Because support staff of the Committee had used the funds; the reply to the Chairperson of the select Committee from the Executive Authority of Parliament was that R12 000 would be deducted from that staff member
- Scenario two: The Chairperson had convened a meeting where he had asked the Committee secretary to explain to Adv Tau the circumstances under which the decision was made on how to use the funds. Secondly, the expenditure of the funds would go through as unauthorised expenditure and would be captured as such in the financial statements of Parliament in the quarterly and annual reports of Parliament.
- Scenario three: the final proposal was that the members that had eaten at the restaurant could have the amounts they had spent deducted from their salaries as well.
The Committee adopted its minutes for the 11, 19 and 27 October, 1, 2, 4, 8 November 2016 with amendments.
The Chairperson welcomed all the members present and made some household announcements starting with the matter of the Committee Secretary being off-sick and his repeated request to the Acting Manager for the finance cluster in the National Council of Provinces (NCOP) that the secretary be issued with a cellular phone as he had raised the matter before at a Chairpersons meeting of the NCOP and a Joint Chairpersons meeting for the National Assembly and the NCOP.
He further noted apologies from members absent from the Committee and requested that they be accepted as submitted. Following the acceptance of the apologies the Chairperson read out the agenda noting that the Committee report on the Provincial Treasuries expenditure review for the third and fourth quarter of the 2015/16 financial year had been circulated twice before for the Committee’s perusal and his hope was that all the Members of the Committee had read the draft report so that it could be considered.
Committee report on the Provincial Treasuries Expenditure Review for the third and fourth quarter of 2015/16 financial year
The Committee went through the draft report page by page.
The Chairperson said that during the lock-up session the Chairperson of the Finance Committee in the Limpopo Legislature had approached him requesting that the NCOP recall the Limpopo Legislature to engage on the post-intervention situation in that province. He had requested that person send a formal letter to the Select Committee so that it could be considered by the Committee but this had not yet been received.
The Chairperson reminded the Committee about a presentation from the Auditor-General South Africa (AGSA) the previous week commenting that the Select Committees on Finance and Appropriations would have to jointly facilitate the Standing Committee on Public Accounts (SCOPA) role on the work presented by AGSA as the NCOP did not have a SCOPA Committee. The Committees would also have to review its engagement with provincial treasuries as part of the work on the AGSAs report to Parliament.
The Chairperson then asked for adoption of the report.
Ms T Motara (ANC: Gauteng) moved for adoption of the report.
Mr S Mohai (ANC: Free State) seconded the motion.
The Committee report on the Provincial Treasuries expenditure review for the third and fourth quarter of the 2015/16 financial year was adopted without amendments.
Tabling of the Committee report on the Mexico Study Tour
The Chairperson said the Management Committee (MANCO) had waited for quite a long time for the documents from some of the stakeholders which the Committee had visited such that the SA Embassy had had to step-in to assist. The MANCO was formally tabling the report and his request was for the Committee to thoroughly engage the report so that inputs could be sent to the support staff. He added that the report could not be allowed to stand over for 2017.
Outstanding Committee Minutes
Committee Minutes dated 11 October 2016
The Chairperson said he had requested the presence of Mr Tshabalala and Advocate Tau regarding the utility of the Contingency Fund for two evening dinners during the study tour to Mexico.
The Chairperson asked the Committee to give inputs on the matter.
Adv. Mongana Tau, Finance and Economics Cluster Manager, said that he was with the Committee on behalf of the Committee section and anything that would required him to consult Mr Tshabalala he would do so. Additionally he was not sure whether what had been discussed by the MANCO could be presented to the Committee as he felt the matter of the use of Contingency funds had been clarified there.
The Chairperson reported that the MANCO had met previously to deal with the Contingency funds issue. Essentially the accommodation and ground transport arrangements had been made by the Department of International Relations and Cooperation (DIRCO) and the SA Embassy in Mexico. The Committee delegation had to have dinner at a club facility on the 40th floor of the Hotel where it was being accommodated. The delegation had complained about the quality of the food at the club for two nights where they had had dinner. The Chairperson together with Mr Mohai had engaged the Committee Secretary and an official of DIRCO on the matter to ascertain whether DIRCO would be able to refund Parliament if the delegation forwent the inhouse restaurant and ate elsewhere. DIRCO could not respond on the spot in that regard. Having then used the Restaurant and since that engagement there had been exchange of emails with DIRCO on the matter where the Chairperson was told that it would take another process for DIRCO to refund Parliament though the club facility had not been used for the remainder of the dinners during the study tour. The Chairperson had also asked Mr Tshabalala as to why DIRCO had been used to arrange and organise accommodation and transport when the Standing Committee for Finance had used a service provider for the same things. Ms Anthea Joubert had then sent three documents explaining the directives for delegations but the directives were for DIRCO officials. The Chairperson had met with Mr Tshabalala again who had then referred the Chairperson to Adv Tau whom the Chairperson had then subsequently forwarded all the relevant documentation.
- Scenario one: to use Contingency Funds there had to be permission given by Parliament as the funds belonged to Parliament. Parliament had not been engaged that evening in Mexico.
- Scenario two: Because support staff of the Committee had used the funds; the reply to the Chairperson was that R12 000 would be deducted from that staff member. The Chairperson had convened a meeting where he had asked the Committee secretary to explain to Adv Tau the circumstances under which the decision was made on how to use the funds. Secondly, the expenditure of the funds would go through as unauthorised expenditure and would be captured as such in the financial statements of Parliament in the quarterly and annual reports of Parliament.
- Scenario three: the final proposal was that the members that had eaten at the restaurant could have the amounts they had spent deducted from their salaries as well.
Adv Tau explained that when a Committee was on oversight or a study tour and it was not satisfied with any service rendered, the first thing to do was to bring the matter to the attention of Parliamentary authorities. In the case of the Mexico Study tour the budget holder had been Mr Sikhumbuzo Tshabalala, Committee Section Manager and as soon as he was made aware about the complaint about services rendered, his approval of the complaint would then mean that the service provider would be notified about termination of contract so that an alternative provider could be sourced.
From the reply that DIRCO had given, it seemed that the Department had not been notified that the service had to be terminated as there were complaints, whilst there had been the issue that no authorisation had been sought to terminate the contract as well.
Secondly, the Contingency Fund was not meant for catering, but “Subsistence and Travel Allowance (S&T) was meant for catering. Even if the Committee applied to have the expenditure captured as unauthorised, it would not be accepted because the contingency fund had been used.
The Chairperson said that he had also requested Mr Tshabalala to include a directive with a travelling delegation leaving SA that if there were contingency funds they were for emergencies as that had not occurred with the Mexico Study Tour.
Mr L Nzimande (ANC: KwaZulu Natal) said the Committee seemed to be moving away from the issue because the principal matter had been the anomaly which had existed where an individual had to be liable for the consequences of that decision. He had no issue to pay for what he had eaten as suggested in the third scenario but the intention of the SNT was not catering as dinners were paid for during international trips, unless otherwise stated. The Committee had to be clarified first as to what then happened to the money which it had not used at the club having used DIRCO as a service provider.
Mr T Motlashuping (ANC: North West) said the reason the Committee had requested a report was to get clarity on how R5000 had been determined for each member as S&T. His proposal was that the Committee await the report, not withstanding that the secretary of the Committee had to date been put in a corner.
Ms Motara said that the travel policy that DIRCO used was different from that policy which Parliament used. She agreed that the anomaly created by DIRCO by substituting itself for a service provider created alot of other issues. For international travel, Members of Parliament (MPs) were entitled to accommodation, dinner, laundry and ground transport. DIRCOs communiqué had related to a member who would have been travelling with a Minister which spoke to DIRCO officials. There had been alot of other things that had occurred whilst on that tour which the Committee could raise with Parliamentary authority, apart from managers. If DIRCO got refunded for whatever purpose as a result of the delegation not having used a particular facility where would that money go to? From experience MPs knew that anything additional and beyond what had been provided for came out of individual MPs’ pockets, and indeed S&T was not for prescribed travel items. Moreover the S&T was different when officials of Parliament travelled with MPs.
Beyond using the correct policy affecting MPs, the political approval in Mexico had not come from the Chief Financial Officer (CFO) of DIRCO, but the Chairperson of the NCOP which meant Parliament had been responsible for the payment. An Executive Authority (EA) could not sign-off on a payment and then another accounting official which the EA had no jurisdiction over, was to pay for the same thing already approved; that was illegal. She wanted to know how DIRCO had gotten involved in the matter. Her ideas were that embassies colluded to make money out of delegations visiting their missions
Mr L Gaehler (UDM: Eastern Cape) concurred with all the sentiments of the Committee noting that S&T was for lunch but breakfast and dinner was provided for.
The Chairperson said that he hoped that Adv. Tau had noted all the inputs from the Committee. The Committee had one last meeting where Mr Tshabalala and Adv. Tau could be invited to the Committee so the matter of the Study Tour Report to Mexico could be put to rest.
Ms Motara asked if the Committee could also invite the Head of International Relations to be present at a meeting to discuss the study tour report, so that she could come to the Committee to explain how international Relations supported Committees going on international trips together with the Parliamentary policy on MPs travel.
Mr Mohai said that the tone from the MANCO had been to rather have Adv Tau assist the Committee in resolving the issues given the fact that decisions had been taken along the way without the clear understanding of the impact that some decisions would have in terms of moving out of the club facility to the restaurant during the Mexico study tour. As Adv Tau had mentioned to the Committee that the Committee secretary was supposed to have notified Mr Tshabalala and himself however; the Committee was aware of the challenges of getting in contact with Parliament at the time. Indeed all the inputs of the Committee were important for future reference and the Chairperson of the select Committee could perhaps raise some of the issues with the Chairperson for Intergovernmental Relations (IGR) so as to have all the protocols outlined for all Committees in terms of international travel and how S&T was to be used.
Mr Motlashuping said that Mr Mohai seemed to be at odds with what the Committee was proposing, and the Committee was not refusing to pay. All that was needed was for the officials required by the Committee, to be allowed to explain to the Committee all the clarities sought.
The Chairperson said that the Committee seemed to agree that the officials which had not been available had to notify the Committee of a date very soon which would be possible to meet with the Committee. Secondly it recommended that no deductions be done to Mr Zolani Rento’s salary and that as individual MPs the Committee would pay for the food it had consumed for the two nights at the restaurant.
Mr Gaehler interjected that the resolution was that after the officials had briefed and clarified matters, only then would the Committee decide on whether to pay or not for the food.
Mr Nzimande re-emphasised that the purpose of the meeting was to deal with the anomaly that had arisen in terms of application of policy.
The Chairperson then asked for a mover for the minutes.
Ms Motara moved for the adoption of the minutes.
Mr Gaehler seconded the motion to adopt.
The minutes of the 11 October were adopted with substantive amendments.
Committee Minutes dated 19 and 27 October, 1, 2, 4, 8 November 2016
The minutes were adopted with technical amendments.
Fourth Term Committee Programme
The Chairperson said that there had been referrals that had appeared on the ATC of 8 November 2016.
Ms Motara asked the stand-in Committee secretary to read out the latest revision of the programme for the Medium Term Budget Policy Statement (MTBPS).
Ms Estelle Grunewald, Stad-In Committee Secretary, said the Division of Revenue Amendment Bill had not yet been referred it was expected to be referred the week of 22 November 2016 so that provinces that had not been briefed could be briefed and hearings could continue where briefings had already taken place so that decisions could also be taken at the provincial legislature level. The meeting where the Committee would be considering the negotiating mandates had been scheduled for 24 of November 2016. Since most provinces had indicated that they would be preparing final mandates on 25 November 2016, the Committee would then consider those final mandates and draft report on 29 November 2016. Hopefully on 30 November 2016 there could be a decision from the NCOP on the referrals. By Thursday, 8 December 2016 the MANCO had planned that all outstanding Bills would be finalized.
Mr O Terblanche (DA) asked if Ms Grunewald could re-circulate the information as he had some issues with his computer.
Mr Motlashuping said that the programme had been pased on the presumption that the Adjustment Appropriations Bill would be referred on 22 November 2016; however the Committee had to be prepared for an extension if that did not happen.
Ms Motara said that the MANCO had planned to schedule the sitting of the NCOP on 09 December for the morning. She sought Adv Tau’s input on the timeline for the passing of the Bill as the 30 day period since referral of that Bill would have been 7 December 2016 and how that affected that work.
Adv Tau recalled that the last time an extension had been granted had been in 2015 where the legal opinion had been that, there were no consequences indicated in the legislation if Parliament did not comply however; if the legislation was read in the context of budgetary processes and considering the Public Finance Management Act (PFMA). The purpose had been to facilitate that entire budgeting process. If the NCOP did not comply with the 30 days cut-off date that did not make the Bill or its processing illegal.
Ms Motara said she had needed for the Committee to understand this as the MANCO had been advised that the 30 days were provided for to allow provinces to be given their adjusted budgets by National Treasury (NT). NT was allowed to transfer allocations to provinces until a certain cut-off date in January 2017.
Mr Mohai was satisfied that the 9 December 2016 would the date for the final sitting and concurred that it was correct that the Committee was made aware of the implications of the Committee’s programme.
The Chairperson said that on the Taxation Laws Amendment Bills which the Standing Committee on Finance was supposed to vote on, on 22 November 2016, the Committee could still be dealing with that Bill by 29 November 2016 as well. He requested support staff to ensure that the Committee’s report on provincial treasuries is published in the ATC by the 23 November 2016.
The meeting was then adjourned.
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